In the second round of The Dialogue Interviews, Founding Editor Kazim Rizvi sat down with sinologist Dr. B.R Deepak for an in-depth discussion on various aspects covering the Sino-Indian relations.

Prof. B. R. Deepak is Professor of Chinese and China Studies at the Centre of Chinese and Southeast Asian Studies, Jawaharlal Nehru University, New Delhi, India. He is a recipient of many scholarships and awards including the prestigious Nehru and Asia Fellowship, and India-China Cultural Exchange fellowship for his doctoral and advanced studies in the Chinese Academy of Social Sciences and Peking University, Beijing, respectively. He is also the first Indian to be presented China’s highest literary award..

Talk us through your award as the first Indian to receive the highest Chinese literary prize.

It was a great privilege and honour, because it was for the first time in the entire history of India-China relations that an Indian was awarded by the Chinese government. The award was in recognition to my long-term outstanding contribution to Chinese studies, translation, publication of Chinese books, and cultural exchange. But literature is not my main area, it happened so that I was trained in Chinese language and history, therefore I do have an understanding of Chinese civilisations, and since it involves a lot of classical Chinese, I got interested in classical literature. Since Indian literature has left an indelible impression on Chinese classical literature in the course of civilizational dialogue between the two, it was instinctive that I got interested in it. It would not be wrong if I call India and China cultural cousins of the past, where Buddhism acted as an umbrella for the exchanges in every domain whether material or spiritual. We have a recorded history of over two thousand years unparalleled in the history of mankind. It is unfortunate that in India not many people are trained in classical Chinese language, as a result they are not been able to go through these records. I am fortunate that during my Peking University days, I had an opportunity to learn the classical Chinese, as a result I was able to go through Chinese records pertaining to India-China relations, and thats how I ended up doing my doctorate and post doctorate in India-China relations in modern and contemporary times. The knowledge of Classical Chinese and Chinese civilization helps a researcher to understand the Chinese cultural genes. It was in this connection that I thought I must utilise my knowledge of Classical Chinese and introduce Chinese cultural genes to the Indian readers. This is how I ended up translating an anthology of Classical Chinese poetry, and I am happy that my work was acknowledged by the Chinese. The present vice premier of the state council felicitated me during the award ceremony. It may be remembered that in order to understand China, India must understand Chinese psyche very well, which remains coded in their philosophy, culture, history, language and literature.

Where do you see Indo-China ties going from today?

It is good that after the 1962 debacle the relationships started to normalise in the 70s, especially after Rajiv Gandhi’s 1988 China visit. The first two decades since 1988 saw our relationship maturing gradually in terms of dealing with bilateral as well as multilateral issues. This phase continued till UPA II, and we made incremental progress – signing of 1993 and 1996 agreement to maintain peace and tranquillity along the border and more recent the 2013 agreement on Border Defence Cooperation were landmark agreements that managed our differences with China on border. We engaged China in 39 marathon rounds of negotiations on border, during which we saw four Indian National Security Advisors or Special Representatives talking with just a single Chinese representative, Dai Bingguo.

According to his recent memoirs, India-China almost clinched the border deal during short lived Vajpayee government. Inconsistency in policy at times spells disastrous consequences for national interests.

I must admit that attaches importance to consistency and continuation to policy formulation and implementation, which unfortunately owing to various systemic constraints are not seen in India. Though we have managed the border well but it remains volatile, especially when other issues are spiraling out of control and casting their shadow at the overall bilateral relationship.

Can you please elaborate further on this?

I think we have put too much stake on the issue of counter terrorism, which China sees the other way round. Of course the issue of terrorism, especially cross border terrorism remains very sensitive in India. However, even if indefensible for China from an Indian perspective, China owing to its special relationship with Pakistan interprets the issue differently. Technically it says the issue is between India and Pakistan so why China should be dragged into it to make a stand? From Indian perspective China blocking or putting a technical hold on terrorists like Masood Azhar is tantamount to abetting terrorism on one hand while playing an extremely irresponsible role as a major global power. The issue of NSG is less sensitive comparing cross border terrorism but equally impacts negatively on bilateral relations. It appears that our foreign policy with China has been held hostage to these two issues alone. Here again, taking these issues, which are low priority issues for China, to the highest level with that country at couple of occasions, will not leave any room for China beside coming on board with India or Pakistan. Taking these issues, terrorism particularly at appropriate channels would have perhaps yielded better results. Moreover, do we have only two issues with China?

How would you rate the present regime. Don’t you think that China will always try to put India in a spot on border by refusing to recognise Masood Azhar, as a foreign policy tactic? Is it because we are not using the right mechanism or a tactical ploy?

What I am saying is that our approach is a bit flawed. Prime Minister Modi met Chinese President Xi Jinping 6 times in these two and a half years, and almost 2-3 times he is conveying directly to the Chinese president that you have to support us on these issues, I am sorry to say that Chinese diplomacy does not work that way.

Chinese leadership announces the decisions at the highest levels; they do not formulate them at the highest level contrary to the viewpoint that being “totalitarian” they must be doing that way. India’s dialogue on counter terrorism with China is very new, and Pakistan factor will make it more complex, the outcome is there right in front of us.

The NSG story is no different. Somewhere we perceived that China will give in, which was an incorrect way of thinking. It is perfectly alright to aspire for a big power status at global stage, but see the kind of asymmetries we have in economy and defence with China, in order to do away with these asymmetries, India needs to set its domestic drivers right, not for a few years but for decades to come.

Do you think the NSG issue has been overplayed?

Given the nature of India-China relations and Sino-Pak entente cordial, I will say that our expectations from China are unnecessarily huge. Knowing this fact, we are letting two minor issues hijack the entire gamut of India-China ties.

NSG and counter terrorism are not the top notch issues in the India-China relations. The priority should be to have deeper economic stakes in each other’s ecosystems.

Trade, investments, culture, and people to people contact – this will pave way for the resolution of the strategic issues.Trade between the two countries is asymmetric. The trade deficit is huge. It is this issue India should be concerned about. How do we set it right, that should be the key priority. Manufacturing, investment in infrastructure sector and real estate – these three pillars galvanized the entire Chinese economy during the deep globalisation; the only country to take advantage of it in the shortest possible time – in 30 years, see the kind of production capacity they built. It is national economy of a country that gives you political and economic muscle. Biding their time and hiding their capabilities, the Chinese in 30 years built an economy that is five times larger than India which at 1991 used to be almost similar size of India’s. We are nowhere in terms of defence and manufacturing – we would be foolish if we didn’t capitalise on Chinese capital, technology and over capacities, and bring down our trade deficit with them. If we do not do that the gap will widen, we will lose out not only in geo-economics but also in geopolitics, for both are integrated, and the way China is integrating itself deeper with the global economy.

Talking economics between china and India – India is now trying to emerge as an economic superpower. What does India need to do to match or overtake Chinese rate of growth?

Lets acknowledge the fact that contrary to the expectations of many that Chinese economy will have a hard landing after decades of breakneck economic growth; Chinese economy registered a growth rate of 6.7% in 2016 thus contributing to 39% to the global economic growth. This is impressive as the global economy continue to limp to recovery with a lackluster growth of around 3%. The contribution made by the largest economy of the world, the US is just one-fourth of the contribution made by China. Imagine the hard landing of Chinese economy and its repercussions on the world economy! The global economic growth will slump to around 2%! Therefore, China remains an engine of the global growth, and it is in India’s as well as global interest that it remains so.

Now there is an opportunity with kind of economic restructuring that is taking place in China – labour intensive industries are phasing out and higher end manufacturing have been prioritised. In India the young population and huge labour base has ignited hopes for a China type success story, which would be extremely difficult to replicate given the inward looking and protectionist West. But still, I think first and foremost we need to build capacities in infrastructure and manufacturing. China is willing to invest in India– in roads, ports, railways, power etc sectors. They have already invested heavily in telecom, and today the entire Indian telecom industry is heavily reliant on Chinese telecom equipment and services.

Look at the energy sector –80% of our power sector is heavily dependent on China so much so that the security ghost has raised its head again as it is believed that Indian companies are heavily relying on Chinese supervisory control and data acquisition (SCADA) systems in their transmission grids thus making these vulnerable to hacking from China. People like Adani made fortunes from their association with Chinese power companies. There are many examples, see the chunk of the raw materials for our pharmaceutical industries originates in China. In partnership with China, we have successfully built our capacities in these sectors; similar capacities need to be built in other sectors, say rail and roads, solar, real estate etc.

I recently made a visit to Fujian, and mountainous province of China connected with high speed rail and express ways by hundreds of tunnels. I cannot imagine that kind of development in Himachal in decades to come. A small port I visited here had a handling capacity of 2.5 million containers per annum, forget about the Shanghai port that handles 33 million containers. Now compare it to our largest deep water sea port, Nava Shera! Ten times more! We need to build such capacities if we want to alleviate millions from poverty and find a place at the high table, for trade, commerce and foreign policy are all inter-connected.

Do you think strategically it makes sense to depend so much for infrastructural growth on one country i.e. China?

Let’s take the example of China relations and trade dynamics with US and Japan – US both remains enemy number one and two of China. But you see the kind of deep economic stakes they have in each other’s economic systems, the US and China have 550 billion dollars of economic trade between them. Can we think of similar stakes in China’s economic system? If we do then problems such as NSG and counter terrorism will have different connotations and interpretations. I believe even Sino-Pak entente will mellow down and the trilateral relationship will be defined differently.

China capitalised on its labour intensive industries by inviting huge investment from these countries and alleviated 700 million people from poverty. However, now, China is losing the edge as the labour costs have gone up, now they are moving from low-cost products to high-end products. The share of manufacturing has come down to 55 percent from 65 percent. India has a real opportunity to capitalise here.

The Japanese remain distrustful of the Chinese and so remain the Chinese of the Japanese, but you see they saw opportunity during late 80’s and the 90’s, and huge Japanese investment took place in China. We should not lose the opportunity which has been provided because China has a lot of capital. Their forex is 3 trillion dollars, which is larger than our GDP.

We seem to be happy that china growth is slumping – it is not slumping, china is restructuring its economy. This also demonstrates that the ‘New Normal’ of the Chinese economy, i.e. rebalancing from a manufacturing and export driven economy has made headways in shifting to services and household consumption, for example, in 2016 China trumped US as the largest retail market at $4.88 trillion, and if the figures of the 2016-17 edition of the Blue Book of China’s Commercial Sector published by Fung Business Intelligence and the Chinese Academy of Social Sciences are to be believed, China’s retail market will reach $7.5 trillion dollars in 2020. The key driver for this transformation has been the information technology accompanied by the public service goods China has provided to its citizens. It is not surprising that almost 50% of the e-commerce is happening in China. Surprisingly biggest benefactors of India’s demonetisation are the Chinese companies. Paytm, has 40 percent Chinese stake. We cry foul over purchasing Chinese products, but demonetisation has helped china indirectly. The market share of the Chinese smart phones has jumped to 54% and it will continue to rise with India calling for a cashless economy. Believe it or not willingly or unwillingly, directly or indirectly we are transacting with China in a big way. So why not to go overboard? It will essentially bring down the asymmetry. If China invests a lot more they will favour growth and stability in India, and may influence Pakistan to tone down their anti India tirade. There are alternate opinions emerging out in China. For example recently a former diplomat in his blog openly called on China to support India on Masood Azhar’s issue. He said by doing so, China will signals to India that it is keen to develop partnership with India, to Pakistan it will signal that no doubt we are iron brothers but do not fish in the troubled waters; and to international community it will signal that China is a responsible global player. Therefore, it is the time that we rebalance our relationship with China. We must not isolate ourselves geopolitically, as we appear to do so by making the isolation of Pakistan a sole agenda of our foreign policy. Unfortunately we have brought ourselves down to the level of Pakistan buy doing so.

The South China Sea – How do we assess this new playground in the geopolitical contest?

Undoubtedly, China has been extremely assertive as far as its core interests are concerned. South China Sea has been defined by China as one of its core interest. It is sending strong and clear signals to all stakeholders. As far as the US is concerned, they have undermined the US presence in the region and have reclaimed whatever 6-7 islands they had to reclaim. Perhaps there would be no more reclamation. Secondly, they have expressed that freedom of navigation and overflight had never been an issue. But if the US will try to shrik their space and remain insensitive to the 9 dash line, China will break free from the first island chain, which they have done recently. Red lines have been drawn as far as these core interests including Taiwan are concerned, and China will not hesitate to confront the US even militarily. As regards the ASEAN, China has told them that lets sit and talk and resolve the issues bilaterally, if not China can flout the international rulings as was the case with Philippines. Winning over Philippines, as a matter of the fact a slap on the US face, thus challenging the norms set by the US in high seas. As far as India is concerned I think that we are neither a non-party to the dispute nor a player there to be frank. We are there because of the US as they want us to play more active role in the so called global affairs. That is why the joint statements with Japan and US that simply displease the Chinese. China knows India position and its strength very well. Our naval capabilities are limited as we cannot project power, it is just like making a noise, which neither China nor the ASEAN takes seriously.

China respects power and knows we are not there as yet albeit it is apprehensive of India’s strengthening partnership with Japan, Vietnam and the US. However, can Vietnam become what Pakistan is to China? I believe not.

China remains largest trade partner of Vietnam with a total trade volume of 87.8 billion dollars which is expected to reach 100 billion in 2017, a huge volume for a people 95 million people. It will never spoil its relationship with China at India’s cost. You see what happened in Mongolia, China flexed its muscles and Mongolia paid the price rendering India’s ‘aid’ ineffective.

That’s why first and foremost we must make our domestic drivers strong enough. India’s position in our neighbourhood and globe would be determined by these. At political level, continuation of economic policies is very important. India must build capacities, maintain the growth momentum so as these countries see India as an opportunity rather than a threat. If we harp on security issues more than the desirable levels, these countries in the periphery will look towards China as a countervailing force, and that’s what precisely has happened to our relationship with these countries. Only and only, an affluent India can set the equations right security, economic or otherwise.

CPEC is one of the six economic corridors China has identified as part of the Belt and Road Initiative or the so called ‘One Belt and One Road’ i.e. the idea of building Silk Road Economic Belt and the 21st century Maritime Silk Road. These economic corridors are China, India, Myanmar Economic Corridor (BCIM); China Pakistan Economic Corridor (CPEC); New Eurasia Land Bridge; China, Mongolia, Russia Economic Corridor; China Central Asia economic corridor; and China, Indochina Peninsula Economic Corridor. Of these China has committed 51 billion US dollars to the CPEC, which has been termed as the pilot project. Xi Jinping also announced the establishment of a Silk Road Fund with 40 billion US dollars to support infrastructure investments in countries involved, and have also linked the establishment of Asia Infrastructure Investment Bank (AIIB) and BRICS New Development Bank (NDB) to the initiative as well. Moe than 65 countries are on board the initiative that advocates peace and cooperation, openness and inclusiveness, mutual learning and mutual benefit. Never before in history has Chinese economy been integrated to the ASEAN, South Asia, Eurasia, Africa and Americas. The appetite for integration has been greater than before, and that’s why we see China campaigning for more FTAs including the recent one, Free Trade Area of the Asia Pacific (FTAAP).

It is true that China never consulted India when BCIM was made part of the Belt and Road, and so is the case with CPEC that runs through territories claimed by India. India has conveyed its unhappiness to China over the CPEC at the highest level. But CPEC is not the only corridor along the Belt and Road.

There are many areas where India’s policies for globalisation could meet the Chinese. Both India and China, I believe would be in the same camp as far as globalisation verses anti globalisation is concerned. It is extremely important to align Make in India, Sagarmala and other initiatives with those of China and strive for a win-win cooperation. India needs to rebalance its policies towards China. We should be looking forward for Chinese investment even if China categorises it within OBOR.

China plans to invest 1 trillion dollars in the OBOR. 57 billion dollars alone in the CPEC. Huge capital is going out of China; it would be unfortunate if be remain outside this global supply change. Rather we need to identify projects that could be docked to OBOR and reap benefit for the people and country.

Do you think we are not doing it?

We are ambivalent as far as building relationship with China is concerned. Our discourse on China veers around security paradigm or that of a competition and conflict paradigm. I believe there is a need to shift this paradigm and replace it that of cooperation and partnership. There are tremendous scopes in every field and strong complementarities at this point in time. The traditional mind-set, that we should not give access to China in the age of information technology and globalisation will fatally injure our interests; we have not been able to deny access to China all these years, therefore, rather than alienating ourselves we need to align our developmental strategies with those of China, have deeper economic stakes in each others economy and usher into a new era of cooperation and partnership.

On Trump and and his policies towards China.

Trump remains highly unpredictable. However, he is a businessman after all. He would like to secure good business deals for the US. The TPP is the first casualty of his retrenchment policy. In essence it will enable China to increase its sphere of influence in Asia Pacific. I won’t be surprised if Trump fastens the chances of China emerging as the next global power. Nevertheless, there may be a paradigm shift if he is successful in winning Russia to the US side. Kissinger is already working on it. Kissinger is the man who brought US closer to China in order to pin down Russia in 1972. The circle will come to a full if he is able to win over Russia for the containment of China.

As regards China, it will continue to harp on ‘Three Nos” i.e. non interference in the internal affairs of other nations; not to seek the so called ‘sphere of influence’; and not to strive for hegemony or dominance. Though it will not challenge the US hegemony, however, there would be red lines as far as China’s core interests are concerned.